From billion pound industry to just £22.50 a night...

Gary McDonald Business Editor

THE extent of the collapse in Belfast's hotels sector has been laid bare in a new report which reveals that its trading performance was the second-worst of 22 UK cities, with room revenue slumping to just £22.50 a night.

Comparing July this year with the same month in 2019, occupancy rates in Belfast slumped from 79 per cent to 21.4 per cent while the average daily rate dipped by 25 per cent to £71.96, PwC's hotels forecast report says.

And ironically the findings come as official figures reveal that, as expected, tourism in Northern Ireland generated revenues of £1 billion last year for the first time ever.

The PwC report showed that, over a 12-month period from July 2019 to July 2020, revenue Per available room RevPAR) in Belfast, which had been above the regional average (£55.88 compared to £53.12), dropped to £22.48 (the UK regional average is £25.56).

But the significant investment in city centre hotels in the previous two years, which led to record increases in room numbers, means Belfast is well-placed to take advantage of a new norm in tourism.

PwC partner Cara Haffey said: “Those looking for signs of potential new revenue streams are converging on staycations.

“Many hoteliers have invested significantly for the long-term in recent years and will encourage domestic travellers who might otherwise have planned overseas breaks.

“Lockdown has turned some of us into unofficial freelancers for Tourism NI as we seek out getaways closer to our doorsteps and share them on social media.”

She added: “The hotel sector has demonstrated great resilience in the face of unimaginable pressures. The months in lockdown were spent preparing for reopening, and the enhanced safety measures paid off with a three-fold increase in visitors in August compared to last year.

“As we come to the end of the furlough scheme, which served as a vital lifeline, hotels have had to be mindful of the claims they’ll be making around the new scheme, and things are likely to get more complex from November 1.”

Sam Ward, UK hotels leader at PwC, said: “Amid so much uncertainty, it’s imperative that hotels ready themselves for a difficult winter and act swiftly to demonstrate their adaptability.

“This is the time for hoteliers to look at their business model and find ways to cut costs. Those who can shift their focus to new customers, reorganise their operations and find innovative solutions stand the best chance of weathering the storm.”

Meanwhile figures from the NI Statistics and Research Agency showed that tourism revenues increased 8 per cent last year on 2018 to break the billion barrier, led by 31 per cent of additional spent by visitors from the Republic of Ireland.

Tourism NI chief executive John McGrillen said: “Whilst welcome, these figures are really bitter-sweet. They show how well the tourism industry was performing before the current Covid crisis.

“But they do how the growing interest in Northern Ireland as a tourism destination, particularly in close-to-home markets.”

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